REAL ESTATE: Mortgage safety net for unemployed

With fiscal cliff talks on the precipice, the state is reminding out-of-work homeowners who are concerned their federally extended unemployment benefits will run out that thereâs a safety net to fall back on in 2013.

The state-managed program, Keep Your Home California, provides up to $3,000 in mortgage assistance monthly up to nine months to out-of-work homeowners.

âTens of thousands of California homeowners could lose their unemployment benefits in the next few weeks unless Congress and the President agree to further extend federal unemployment benefits, and that will certainly devastate many families,ââ Claudia Cappio, executive director of California Housing Finance Agency, said in a statement.

âWe donât want struggling homeowners to lose their unemployment benefits at the end of the year, and then be faced with the very real possibility of losing their homes.ââ

In the Inland region, as many as 44,000 people are at risk of getting the federal cut-off notice.

Di Richardson, program director, said the state does not have a specific number of out-of-work Inland area homeowners who would be in that pool but gave indication it could be well into the thousands.

âFor those who benefits are ending, they need to apply this month,â she said in an interview.

The appeal was issued because homeowners must be collecting unemployment benefits from California Employment Development Department to qualify as an applicant for the program.

If the application is made on time, Keep Your Home California can continue to make mortgage payments for out-of-work homeowners who are approved and enrolled in the program, regardless of whether the federal unemployment benefits are extended, or not, Richardson said.

To qualify, an EDD-unemployment recipientsâ mortgage payment must exceed 31 percent of their income. Total household income for a Riverside or San Bernardino county homeowner applicant must be less than $75,950, she said.

The loan balance has to be under $729,750. The mortgage holder also must be one of 100 participating servicers, which include Bank of America, CitiMortgage, GMAC, Provident Funding, U.S. Bank and Wells Fargo.

Keep Your Home California, to date, has helped 16,296 homeowners and funded $151.3 million toward mortgage payments since the program began in February 2011. The total amount allocated for the program is $875 million, Richardson said.

Richardson said the program can be a lifeline.

âWhen youâre collecting unemployment benefits, itâs only a portion of what you were making,ââ she said, so homeowners are seriously juggling to make ends meet, and sometimes have to choose what gets paid and what doesnât. âThis gives them a little bit of breathing room while looking for a job, so theyâre not fighting off foreclosure at the same time.â

Applicants wonât be considered if they are in bankruptcy, had a Notice of Default filed on the property, do not own or live in the home, or are participating in the Home Affordable Modification Program.

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